Consent agreement may be part of Detroit's future

AP Photo | Carlos OsorioDetroit Mayor Dave Bing delivers his third State of the City address on Wednesday, March 7, 2012.

A high-stakes game of political brinksmanship by city and state officials aimed at shoring up Detroit's financially-battered books may ultimately place its unions under a consent agreement that includes pay and benefit reductions, but keeps a state-appointed emergency manager out.

The mere specter of falling under the reign of an emergency manager may be enough to force unions into accepting concessions as part of an agreement designed to help reduce the city's multimillion dollar budget deficit. But it's no guarantee.

While a consent agreement could allow Detroit to save public face by preserving local authority, it also allows for a state takeover if the city fails to comply with provisions that include timely reporting of finances and following operations and recovery plans.

Mayor Dave Bing, in Wednesday's State of the City address, all but canceled out the possibility that Detroit would be saddled with an emergency manager when a team completes its review of the city's fiscal situation and gives its report to Gov. Rick Snyder.

If a review team finds a financial emergency exists in Detroit, Snyder can appoint an emergency manager, enter into a consent agreement with the city or allow Detroit to work its way out of its troubles.

Snyder has said he'd prefer a consent agreement, which comes with stiff requirements for the city yet keeps local leaders in control of the purse strings and operations. An emergency manager could take all of that away, even removing the mayor and council from their day-to-day duties at City Hall.

"If the city enters into a consent agreement, then essentially what we're doing is we're entering into a contract that says we acknowledge that we've got some serious problems and we agree to the following steps in order to fix those problems," one-time mayor and current Councilman Ken Cockrel Jr. said.

"It ultimately will fall to the mayor to implement the consent agreement to meet those deliverables and to meet the timetable. The mayor, frankly, hasn't shown much of an ability to execute and get things done. That's the concern I think that council has."

Public Act 4 allows an emergency manager to control a city or school district's finances. The manager also can do what local government can't: toss out and restructure bulky union contracts.

Bing said he and Snyder agree that an emergency manager would not be best for the city. The law allows for an emergency manager to be appointed if conditions under a consent agreement are not met.

"There is a major hammer waiting for you, if in fact, you fall out of compliance," Councilman James Tate said.

Bing has sliced a $300 million deficit to $197 million and cut nearly 3,000 jobs in his two and a half years as mayor. But Detroit could be broke and out of cash before the start of summer.

That's the landscape Bing inherited. For months he has used the threat of an emergency manager to get Detroit's municipal unions to agree to a 10-percent pay cut, pay more for health benefits and approve changes to work rules. Deals were reached last month but haven't been ratified.

"It's been a theme ever since the law was passed," said John Riehl, president of the American Federation of State, County and Municipal Employees Local 207. "It's not a toothless threat. I think the law was designed for Detroit to go after cities the state won't help."

State election officials likely will decide within two months whether opponents of the emergency manager law have gathered enough valid voter signatures to temporarily suspend the measure and put it before voters for a final verdict in the November election.

If a consent agreement is in the works, it would not be the city's first. Since 2003, the police department has been operating under two federal consent decrees, including one that deals with the use of force.

A monitor appointed to oversee Detroit's compliance resigned in 2009 after a judge learned she had personal meetings and inappropriate contact with Kwame Kilpatrick, who was mayor when she was monitor.

Kilpatrick was forced out as mayor in 2008 as part of a plea deal in a criminal case. He's now under a separate indictment in a federal corruption probe.

"The city's not just had a problem with consent agreements but just day-to-day operations," Tate said.